Speculative stocks were hit after Federal Reserve Chair Jerome Powell turned hawkish amid the detection of a new COVID-19 variant, Bloomberg reported.
Stay-at-home and re-opening shares have declined by about 5% this week, while US stock futures dropped, with the Nasdaq 100 lagging both the Dow Jones Industrial Average and the S&P 500.
Analysts attributed the decline on Powell’s hawkish remarks signifying that the Fed is “biased” toward tightening monetary policy, indicating predominant risks to growth moving forward.
Powell on Wednesday declared that officials should look into expediting the withdrawal of policy support amid fears that restrictions may be reimposed due to the detection of the COVID-19 Omicron variant.
Both the two-year and 10-year Treasury yield curves have recorded the flattest since January, hinting that traders aren’t expecting a long-term inflationary uptick.